The costs associated with attending college have risen over the course of decades, and as tuition has risen, so too has the need for students to plan carefully to avoid excess debt. Before attending college, a student should be sure to research all financial aid options, including scholarships, grants, loans, and so on. Financial planning for college starts before the student attends school and does not end until long after he or she has graduated. It is best to draw up a semester by semester budget to ensure the student is living within his or her means and not accruing debt.
Financial planning for college will include addressing living expenses such as food, entertainment, and even rent and utilities for students who live off campus. Tuition and books will be the most significant costs associated with attending college, but other expenses can add up quickly, so the student will need to keep spending in check. Whenever possible, financial planning for college should exclude or limit the use of credit cards, which can bog a student down in debt at high interest rates. Many college students get into financial trouble by using credit cards, so avoiding these when possible is advisable for the best financial planning for college.
A student who is planning for college should consider ahead of time the steps he or she will take to pay off debt once graduation is over. If the student has not taken on too much debt for tuition and he or she can pay off the loans quickly, it is advisable to get rid of this debt as soon as possible. If the student has debt associated with several lenders, he or she may want to consider consolidating those loans at a lower, fixed interest rate. This will make payments easier to make, and lower interest rates means lower monthly payments. Paying off high interest loans first is the best course of action, then lower interest loans can be tackled.
A student should remember that he or she will need living money; while it will be tempting to throw as much money as possible at student loan payments, it is important to be careful to budget for everyday expenses and other bills. Paying more than the minimum payment on a loan is a good idea, but paying too much can leave the student without any money for common living expenses, as well as emergency or unforeseen expenses.
